Yakub02
Banned
Business of Consignment sales
An entity might deliver a product to another party (such as a dealer or a distributor) for sale to end customers under a consignment arrangement.
Indicators that an arrangement is a consignment arrangement include (but are not limited to) the following:
the product is controlled by the entity until a specified event occurs, such as the sale of the product to a customer of the dealer or until a specified period expires;
the entity is able to require the return of the product or transfer the product to a third party (such as another dealer); and
the dealer does not have an unconditional obligation to pay for the product (although it might be required to pay a deposit).
These arrangements are common in the car industry where manufacturers deliver cars to showrooms on consignment.
Control of a product held in a consignment arrangement has not passed. Revenue is not recognised upon delivery of a product held on consignment but at a later point in time (depending on terms in the contract).
Elements of cost The cost of an item of property, plant and machinery consists of: its purchase price after any trade discount has been deducted, plus any import taxes or non-refundable sales tax; plus
An entity might deliver a product to another party (such as a dealer or a distributor) for sale to end customers under a consignment arrangement.
Indicators that an arrangement is a consignment arrangement include (but are not limited to) the following:
the product is controlled by the entity until a specified event occurs, such as the sale of the product to a customer of the dealer or until a specified period expires;
the entity is able to require the return of the product or transfer the product to a third party (such as another dealer); and
the dealer does not have an unconditional obligation to pay for the product (although it might be required to pay a deposit).
These arrangements are common in the car industry where manufacturers deliver cars to showrooms on consignment.
Control of a product held in a consignment arrangement has not passed. Revenue is not recognised upon delivery of a product held on consignment but at a later point in time (depending on terms in the contract).
Elements of cost The cost of an item of property, plant and machinery consists of: its purchase price after any trade discount has been deducted, plus any import taxes or non-refundable sales tax; plus
